Feature

The Case Against Hurwitz
In one of the last big S&L cases from the '80s, two federal agencies are pursuing Charles Hurwitz over the failure of united Savings. And for once, Hurwitz may have no place to hide.

By Laurel Brubaker Calkins
On a crisp, midwinter day on the University of Texas campus, Houston financier Charles Hurwitz's famously pained smile was growing more pained by the moment. Beads of sweat were faintly detectable on his forehead, and his knuckles were noticeably whitening as he gripped the sides of the lectern.

Clad in his trademark dark pinstripe suit and starched white shirt, the CEO of Houston-based Maxxam Corp. was trying to lecture fledgling MBAs on -- of all things -- business ethics. But he was repeatedly interrupted midsentence by the muffled shouts of protesters surrounding the lecture hall. Accompanied by the drumming of angry fists on the wall outside and by the crackle of police walkie-talkies bleeding into the auditorium's sound system, Hurwitz's high-minded speech descended rapidly into farce.

Hurwitz struggled grimly to a conclusion and then took a few questions from the audience. To his obvious consternation, the students peppered him with accusations lifted straight from the protesters' fliers. Hurwitz nervously dodged several pointed queries, then stopped abruptly and fled -- pale and shaken -- out a back door to avoid the protesters.

It was the first time Hurwitz had come eye to eye with his most vociferous opponents, and the confrontation clearly rattled him. He had gone to Austin in that February of 1990 expecting to encounter only a sympathetic audience of business students. The lecture was the idea of his longtime mentor, George Kozmetsky, former dean of the UT business school and a board member of Hurwitz's Houston-based United Savings Association, which was Texas' largest thrift until it collapsed in 1988 at a cost to taxpayers of $1.6 billion.

Instead of a receptive student audience, Hurwitz was blind-sided by more than 40 protesters from the fringes of the environmental movement, some of whom had flown in from California strictly to heckle the reclusive corporate raider over the redwood logging practices of Maxxam's Pacific Lumber. Chanting "Axe Hurwitz, not the redwoods" and "Redwoods, not deadwoods," the protesters were barred from the lecture hall. But they busied themselves outside, picketing on the sidewalks and singing protest songs, keeping time with the music by beating on the auditorium walls.

One of those booing Hurwitz that day was Neal Tuttrup, an Austin landscaper and member of Earth First!, who got a glimpse of Hurwitz as he scurried from the rear of the lecture hall under police escort and dove into a waiting red Camaro with the license tag "CHEERZ." The activist gleefully recalls the fear in Hurwitz's eyes as the Camaro squealed away from the curb, racing off toward the highway that would take him back to Houston.

"I don't think he was used to having to deal with his opponents so directly," Tuttrup says, grinning at the memory. "He looked like a cornered rat."

Not that combat and opposition were anything new to Hurwitz. He's been dogged by angry investors and government regulators for almost his entire business career. But today, Hurwitz is the target of two different federal agencies that are pursuing what are expected to be the last big legal cases arising from the savings and loan debacle of the 1980s. And Hurwitz is finding it isn't so easy to duck out the back door, when it is federal regulators -- instead of a mob of disruptive protesters -- who are chasing you.

Charles E. Hurwitz, 55, rides at the helm of an aluminum, real estate and forest-products conglomerate that has been cobbled together over the past 15 years through a combination of junk bonds, hostile takeovers and steely nerves. With assets of $3.8 billion and 1995 revenues of $2.57 billion, Maxxam Inc. is one of the largest industrial concerns in America. Yet few people have heard of it, even here in its hometown.

That low profile could change dramatically later this year, when federal regulators plan to haul Hurwitz into court to face the most serious charges of his career. He stands accused by the Federal Deposit Insurance Corporation and the U.S. Treasury Department's Office of Thrift Supervision of running his old savings and loan into the ground for the personal benefit of himself and his friends.

The alleged wrongdoings took place in the mid- to late 1980s, but the case against Hurwitz and the officers and directors of United Savings has taken almost a decade to wend its way to court. Once there, it will likely prove the fight of Hurwitz's life. While he has not been accused of any activity that could send him to jail, Hurwitz might nonetheless end up stripped of many of the possessions he has toiled a lifetime to accumulate. The asset that die-hard environmentalists want most to see wrestled from Hurwitz's grip is a grove in California's ancient redwood forests, which Maxxam came to possess through a controversial chain of transactions that lies at the heart of the government's case against him.

The $1.6 billion failure of United Savings wasn't the biggest thrift crash Texas saw; Gibraltar Savings Association actually holds that record, costing taxpayers more than $5 billion. But for perspective, it should be noted that United's failure cost 26 times more than the $60 million collapse of Madison Guaranty, the Arkansas S&L that is the centerpiece of the Whitewater affair.

San Antonio Congressman Henry B. Gonzalez is quite familiar with the accusations against Hurwitz and his associates, having spent most of the past decade tracking down S&L violators as chairman of the House Banking Committee. Although Gonzalez lost his chairmanship after the Republicans won a House majority in 1994, he remains dedicated to cleaning up the debris left by S&L failures.

"While there are those who may argue that Charles Hurwitz faces no liability (for the failure of United Savings), I believe this is one of the biggest S&L cases outstanding," Gonzalez says. "Hurwitz may have significant liabilities to the FDIC, and it is possible that any liability could be utilized to preserve some of the most important redwood forests on earth. We're talking about a possible settlement that may be far more important than any money Mr. Hurwitz may owe."

The secretive Maxxam empire is in many ways a reflection of the man who created it: complicated, relatively unknown, mega-rich, often maligned, obsessed with control.

"When you look at Maxxam, it presents a nice, clear Mephistophelean picture of American business," says Dr. Lisa Newton, a professor of business ethics and environmental studies at Boston's Fairfield University. After preparing a case study on Maxxam for the Center for Business Ethics, Newton became convinced Hurwitz occupies a unique niche in corporate America. "I have never seen anyone with this much zeal and cleverness play things so close to the law," she says.

More than six feet tall, with inexpressive eyes and jet-black hair he slicks straight back, Hurwitz cuts a striking figure among Houston's power elite. He and his wife Barbara, a former school teacher uniformly described by acquaintances as a "wonderful person," are close friends of Mayor Bob and Elyse Lanier and until recently were frequently sighted at top-drawer charity events. (A month ago, however, Hurwitz decamped the family quarters in the Houstonian Estates for an apartment at the Four Seasons downtown. The couple has not filed for divorce.)

The son of a successful menswear retailer in Kilgore, Hurwitz earned a bachelor's business degree from the University of Oklahoma. He joined the Wall Street firm of Bache & Co. as a stockbroker, but soon moved to San Antonio to sell mutual funds with his brother-in-law. At 27, Hurwitz linked up with Kozmetsky, founder of Teledyne -- the giant electronics and defense contractor -- and the two kicked off a 20-year string of business deals that combined Hurwitz's smarts and Kozmetsky's money.

In the early 1970s, Hurwitz acquired Federated Development Co. and Summit Group, the latter of which he took public in 1971. But -- in Hurwitz Misstep No. 1 -- the Securities and Exchange Commission accused him of filing false and misleading statements regarding the Summit offering. Hurwitz signed a consent decree to settle the charges, but he later insisted he'd done nothing wrong and had settled to avoid getting bogged down in the midst of financing a deal.

Summit was declared insolvent just four years after Hurwitz took it over, and -- in Hurwitz Misstep No. 2 -- the New York State Insurance Department sued him for fraud and mismanagement of the company, claiming he had illegally siphoned off about $800,000 in profits to the parent company before Summit failed. Again, Hurwitz denied any guilt, but settled the case out of court, reportedly paying back about half of the profits he was accused of skimming.

Undeterred, Hurwitz forged ahead and acquired McCulloch Oil Company (MCO) in 1980 and Simplicity Pattern in 1982, stripping each company of its most lucrative assets and rechristening the remainder Maxxam. He jumped into the savings and loan business in 1983, becoming the largest stockholder in United Financial Group, which is United Savings' parent company. He then leveraged those assets in 1986 to conduct the first major hostile takeover paid for with junk bonds -- his successful raid on Pacific Lumber.

In perhaps his shrewdest deal, Hurwitz acquired massive Kaiser Aluminum at a fire-sale price, after its owner got spooked by the Wall Street crash of 1987. Along the way, he scooped up roughly $122 million in foreclosed properties from the Resolution Trust Corp. and developed a country club residential community in California's sensitive high desert country, drawing the ire of environmentalists and celebrity neighbors alike. More recently, he became the controlling partner of Sam Houston Race Park, emerging as the biggest player in Texas' nascent gambling industry.

"He is the Houdini of high finance," Craig Gilmore, a California investment adviser, told the Wall Street Journal several years ago. "Say what you will about him, the guy makes some great deals."

On a personal level, though, Hurwitz remains an enigma. "His name is so well-known you'd think you could find someone who knows him well with the snap of a finger," says consummate Houston insider Jack Steele. "But I've never really known anyone who knew him."

Hurwitz's official Maxxam-supplied biography consists of just seven sentences, and exhaustive Internet research yields only a few more details to flesh out the skimpy portrait: he is a former smoker and father of two grown sons who enjoys fast cars, an occasional drink and a competitive game of tennis. Most daybreaks find him jogging or pedaling a stationary bike, and he dabbles in blood sports, hunting doves in season.

Business foes who have faced Hurwitz across the bargaining table through the years describe him alternately as charming and witty or cold and arrogant. "Charles came across as so warm and caring," recalls one outfoxed rival in a 1984 BusinessWeek interview. "It took us almost two years to realize we'd lost control of our company."

"Charles Hurwitz is a very friendly, extremely bright, very strongly family-oriented man," says Bob Irelan, who, as Maxxam's corporate spokesman, is paid to say nice things about Hurwitz. "He is well-known to a number of people in government. He is extremely thorough in his research on anything. He is an absolutely brilliant financial mind, and a lot of fun to work for. He does like his privacy, and he doesn't want others to talk about his charitable activities. He doesn't do things because he is looking for publicity. He does things because he thinks they are important and need doing."

We would've liked to have shown you the sensitive side of this intensely private family man. But Hurwitz declined to talk to the Press, as did most of his tight circle of friends.

Nellie Connally, the wife of former Governor John Connally, who sat on the Maxxam board until his death last year, tried to think of a sweet story about her late husband's friend, but was at a loss for an example of Hurwitz's tender side.

"I love Charles and Barbara dearly; she is my very best friend," she confides. "Charles has been facing serious charges ever since I've known him, and people are going to fling things at him forever. But he is a survivor."

Connally suggests Hurwitz's detractors may just be jealous of the success he has attained at a relatively young age. "If he was 70 years old, things might be different than if he was in his fifties. People pick on him all the time. I don't know why people don't like him, but they don't."

Stan Creech, one of the city's best-connected real estate brokers, speculates Hurwitz just may not be the kind of man who makes friends easily. "We both work out at the Houstonian, and I've passed within three feet of him about a million times. I've thought dozens of times about sticking out my hand and introducing myself, but the look on his face always stopped me. His face is so cold and distant."

Declining to offer their insights were apartment developer Jenard Gross and former University of Houston chancellor Barry Munitz, both longtime Hurwitz colleagues who are co-defendants in the OTS lawsuit against Hurwitz. (Where the FDIC suit is against Hurwitz alone, the OTS action also pursues Maxxam, Federated and United Savings officers and directors Gross, Munitz, Arthur Berner, Ronald Huebsch and Michael Crow.)

Dallas financier Harold Simmons, no slouch as a corporate raider himself, managed a thumbnail sketch of Hurwitz, with whom he was friendly when Simmons lived in Houston during the late 1970s.

"I've always found him to be an astute, focused businessman and an investor who understands corporate values and makes good investments for his company," Simmons says. "At social events, he is a very pleasant person, quiet, but very personable. I actually liked him quite a lot. But mostly, he is very focused on making money and on keeping control of his assets. He will pursue that rather single-mindedly."

Not exactly a ringing endorsement. Then again, Simmons should be classified as a former friend of Hurwitz's. Though the two were once close, their friendship cooled when Simmons amassed a 15 percent stake in Maxxam in the 1980s, making the Dallas financier the largest individual shareholder in Hurwitz's empire behind the man himself. Apparently, Hurwitz feared Simmons might give him a dose of his own medicine.

"I guess he felt somehow threatened by me, that I would somehow try to get control of his company," Simmons recalls. "But he has absolute voting control of Maxxam through a super voting stock he holds. I told him I was buying it because I thought it was a good investment."

Oddly enough, Simmons is now suing Hurwitz over a business deal Simmons feels flagrantly favored Hurwitz's personal interests at the expense of Maxxam's other shareholders. Simmons would also like to unload his Maxxam holdings, as the stock has been a dog in his eyes. "It hasn't shown a real good return," he says. "But I'll hold until the price trades closer to the company's intrinsic value."

Simmons' lawsuit highlights something else that's been said about Hurwitz: lawyers love him because much of what he touches turns to litigation.

According to SEC and other public records, more than a dozen major lawsuits and administrative court actions are pending against Hurwitz personally or various parts of his corporate empire. Just one of those actions seeks more than $5 billion in damages, which is roughly 100 times Maxxam's 1995 profits and 50 times Hurwitz's estimated $100 million personal wealth. In 1989, Hurwitz's combined salary, bonuses and stock options totaled $7.48 million, ranking him first on the list of Houston's top-earning executives. In 1994, he pulled down $1.35 million in salary, bonuses and stock options, according to the most recent Maxxam proxy statement.

You can separate Hurwitz's legal opponents into three basic camps: In the first are the dispassionate feds, pursuing Hurwitz for alleged S&L improprieties and violations of financial laws. In the second are the environmentalists, trying to protect the vanishing old-growth redwoods. And in the last camp are an assortment of litigants ranging from disgruntled race track investors like Jim "Mattress Mac" McIngvale and attorney John O'Quinn to other federal agencies, such as the U.S. Department of Labor and the Environmental Protection Agency.

At present, it's the actions growing out of United Savings' failure that likely are giving Hurwitz the greatest cause for concern.

"We're at the tail end of the S&L crisis [with this case]," says Bert Ely, a thrift industry analyst who frequently testifies as an expert witness in big federal cases. "My sense is this is one of the biggest actions they've brought, and Hurwitz is one of the bigger fish."

Most Americans suffer from forced amnesia on the subject of the Great S&L Scandal of the 1980s. Few understood it; fewer still were able to connect it to their personal lives. But the more than $150 billion tab for bailing out insolvent thrifts played a major role in the astounding buildup of the national debt that occurred in the late 1980s. The savings and loan industry itself virtually disappeared as well, with the number of thrifts plunging from more than 4,000 15 years ago to about 1,500 today. In Texas, the number of S&Ls fell from more than 250 in the early 1980s to just 47.

Houstonians have better memories than most Americans when it comes to the S&L debacle. The city's real estate scene was devastated by the tidal wave of construction activity unleashed by hyperactive developers with a line to cash-happy S&L chiefs. Office buildings, shopping centers, apartment complexes and master-planned communities sprang up where there was no good reason for them, and waves of foreclosures began to roll blackly across the landscape. Coupled with the free-falling price of oil and the crashing Mexican peso, real estate values got killed. It didn't happen only in Texas, of course, but the resultant distress here was among the deepest and most widespread.

The charges lodged against Hurwitz by the FDIC last August and against Hurwitz and his United Savings colleagues by the OTS in late December dredge up the worst of the excesses of the '80s: corporate raiders, junk bonds, hostile takeovers, Michael Milken, Ivan Boesky, see-through office buildings, rampant foreclosures and imploding S&Ls.

Nearly all of these came together in Maxxam's 1986 acquisition of Pacific Lumber, which forever linked Hurwitz to the fate of the California redwoods, and which was accomplished, regulators claim, with funds misappropriated from United Savings.

Indeed, of all the players involved in the Pacific Lumber takeover -- Michael Milken, Drexel Burnham Lambert, Boyd Jefferies, Ivan Boesky, Charles Hurwitz and Maxxam -- only Hurwitz and Maxxam have not been convicted in criminal court.

Until Hurwitz came along and acquired control of its parent company, United Financial Group, United Savings was a sleepy, unimaginative S&L much like the one Jimmy Stewart ran in the movie It's a Wonderful Life. But under Hurwitz's direction, the thrift abandoned its traditional residential lending business and plunged headlong into the risky waters of commercial real estate lending and development and started investing heavily in high-risk junk bonds and slippery instruments called mortgage-backed securities. When United Savings failed in December 1988, it hadn't made a home loan in three years, but it had managed to lose more than $275 million on ill-advised financial investments. Meanwhile, losses in its commercial real estate division were piling up faster than corpses in an Ebola epidemic.

Here's how the FDIC sums up a big chunk of its case: "Under Hurwitz's control, the financial condition of United Savings steadily deteriorated. As the institution's financial health plummeted, Hurwitz, senior officers and United Savings board members serving at Hurwitz's request undertook greater and greater risks until both the officers and board members became entirely indifferent to losses the institution might incur. Rather than recognize United Savings' problems and confront them constructively, Hurwitz: (a) dramatically increased the liabilities of the association in violation of federal law; (b) gambled on large, cumbersome real estate projects with no realistic chance of success; and (c) invested in complex financial instruments which the officers understood poorly and which resulted in staggering losses to the association."

Why would Hurwitz do such a thing? Well, both the FDIC and OTS believe he needed to make United Savings' balance sheet look as fat as possible so he could utilize the thrift's assets to finance Maxxam's takeover raids.

In the mid-'80s, Maxxam's corporate assets weren't large enough to support borrowing the half-billion dollars Hurwitz needed to take over Pacific Lumber. But by throwing United Savings' $5 billion in assets onto the pile -- through a little reciprocal bond trading with Drexel Burnham's Milken -- Hurwitz would have more than enough to fund his big deal.

Central to both the FDIC and OTS cases is the allegation that Hurwitz set in motion a complicated chain of interrelated financial transactions -- with the help of Milken and Drexel Burnham -- which effectively freed up United Savings' federally insured deposits to fund Hurwitz's hostile raid on Pacific Lumber.

Federal regulators contend that from 1984 through 1988, United Savings bought $1.4 billion of Milken's junk bonds as an incentive for Milken to peddle $1.8 billion of Maxxam's takeover bonds to other Drexel clients.

Such a cozy relationship is called a quid pro quo, or a related-party transaction -- a type of mutual back-scratching that is written off as standard procedure in most good old boy circles. But while thrifts are legally permitted to buy junk bonds, the law specifically bars them from buying bonds from people they are already doing business with. That's because thrifts play with Other People's Money -- federally insured deposits. After all, if the government has to take the fall for the losses, where is the incentive for thrift managers to sidestep junk-grade investments and deadbeat borrowers?

Both the FDIC and OTS claim Hurwitz accomplished the alleged Drexel Burnham sleight of hand by his command of United Savings' boardroom. Hurwitz denies having legal control of the S&L, but regulators firmly believe he had actual control through a combination of stock and options owned by his family and by Hurwitz friends who also sat on the thrift's board and/or did business with Hurwitz's various companies.

SEC filings show Hurwitz and his family owned 23.3 percent of United Financial Group (UFG), which in turned owned 100 percent of United Savings. Hurwitz associates Kozmetsky and Gross both held sizable blocks of UFG. And up to 9.6 percent more of UFG's stock was parked at Drexel with Michael Milken. Both Hurwitz and Drexel held options that could be converted into additional shares of common stock. So, counting stock and options, Hurwitz had effective control over more than 35 percent of the stock of United Savings' parent company. From a practical standpoint, other directors would be hard-pressed to ignore the wishes of such a powerful shareholder, even if they wanted to.

The feds certainly have no doubts that Hurwitz ran the show. Take a deep breath and follow along as the FDIC lays out the thrift's chain of command in its suit:

"Hurwitz was the controlling force of United Savings, UFG, MCO and Federated," the FDIC suit contends. "He was the controlling shareholder of Federated which, in turn, was the controlling shareholder of MCO. Through MCO and Federated, which held significant stock ownership in UFG, Hurwitz was a controlling shareholder of UFG and United Savings. He was the chairman of the board and chief executive officer of UFG, MCO and Federated. He also served as UFG's president and was a member of UFG's executive committee and the UFG/United Savings strategic planning committee. Hurwitz was also a de facto director and senior officer of United Savings and voluntarily assumed the responsibilities of an officer and director of the institution. He functioned as an active member of the United Savings board, if not its de facto chairman. He directed and controlled United Savings' investment activity; he regularly attended board and committee meetings; he selected United Savings' officers and directors; he controlled and dominated virtually all of United Savings' activities. No significant decision concerning United Savings' affairs was undertaken without his approval."

In a 1992 interview with Houston Metropolitan magazine, no less an authority than onetime S&L owner Bob Lanier dismissed the notion that Hurwitz didn't run United Savings. "Come on," Lanier was quoted as saying. "You know how these things go. It was Charles who called the shots." (Lanier declined to return repeated phone calls for this story.)

Hurwitz, of course, denies he has done anything wrong and is reportedly puzzled that his character has been called into question over matters that took place so long ago. Rather, he prefers to characterize his role in the failure of United Savings as that of a mere "investor" who lost his stake along with everybody else in the great Texas S&L crash.

"Charles Hurwitz and Maxxam have been portrayed as the controlling influence in United Savings, but Maxxam was an investor, as was Federated Development," stresses Irelan, who begins to sound like a broken record if you talk to him long enough. "If you take those two investments and add them together, you get something on the order of 23 percent. That doesn't constitute control. Maxxam was a shareholder. We were an investor, and United Savings turned out not to be a good investment."

Hurwitz's opponents say that argument handily ignores the reality that many of United Savings' directors and officers owed their livelihoods to Hurwitz and also held stock in the thrift's parent company. "If you work for an organization that has anything to do with Hurwitz, you work for Hurwitz," says Bob Martel, a Northern California attorney who is suing Hurwitz and Maxxam on many of the same charges raised by the two federal S&L suits. "Hurwitz ran this thing completely and totally. No one did anything without his approval."

A redwood country native who has dedicated his life to bringing Hurwitz down, Martel says the Humboldt County newspaper he once owned was driven out of business by a Pacific Lumber-led boycott, which was sparked by the paper's anti-Hurwitz editorials. Martel, who has an entire room in his house lined with bookcases and file cabinets stuffed with nothing but Hurwitz-related documents, grew weary of waiting for the government to pursue Hurwitz for the United failure. So he sued Hurwitz, Maxxam and other United Savings directors in 1990 on behalf of the American public, seeking $1.6 billion in actual damages, $4.8 billion in punitive damages and a fine of $10,000 a day "for each day Hurwitz persisted in the lie."

The lie, according to Martel, is Hurwitz's claim that he didn't control United Savings.

Maxxam's Irelan dismisses Martel's $5 billion suit with a disgusted wave of his hand. "It is bizarre E a frivolous lawsuit without any merit," he says. "It has not been joined by the government, though he purports to be suing on behalf of everybody. That should tell you something about its merits."

But one thing the feds and Martel agree on: "Hurwitz had a substantial role in all substantial actions or inactions we've charged (in this case)," claims Richard Stearns, the OTS' deputy chief counsel for enforcement.

That isn't to say the regulators won't have a merry task proving Hurwitz's control of United Savings to a judge and jury. One of the primary problems with proving any accusation or case against Hurwitz is the highly complex structure of Maxxam, a holding company with subsidiary components controlled by interlocking, over-lapping managers and boards of directors. Sometimes, several wholly owned subsidiaries lie between actual moneymaking assets and the parent company, and each group may have a separate layer of financing and collateral. The advantage to this setup is that each company in the pyramid can claim to function on its own; it also makes it particularly difficult to trace which company has which assets and which debts.

A glance at Maxxam's corporate organization chart reminds you of a set of those Russian nesting dolls where, when you take one doll apart, there's another doll inside, and then another and another. Except in Maxxam's case, all the dolls have Hurwitz's face.

"These types of structures are done intentionally, to shield people like Hurwitz from being too closely scrutinized," says Michael Hoffman, director of Bentley College's Center for Business Ethics, located near Boston. "Trying to figure out who owns what and who owes the debts, with so many holding companies and subsidiaries E it is very hard to know where to hit."

Allan Sloan, a Newsweek columnist who has followed Hurwitz for more than a decade, agrees that Hurwitz's elaborate corporate structure is no accident. "You've got to watch what he is doing very closely because his deals are very complicated. He'll lose you in the complexities."

Hurwitz also tends to create single-purpose subsidiaries, which spring up with the frequency of mushrooms after a rain. Sometimes these companies go away after their purpose has been fulfilled. Sometimes, the newly formed entities serve to isolate particular assets from related debts and creditors, so Hurwitz has a better chance of hanging onto them if trouble comes.

For instance, Pacific Lumber was dramatically if quietly restructured after the takeover into three separate companies: One, Pacific Lumber Co., holds title to the land occupied by the company town of Scotia, its sawmills and other operating enterprises. Another, Scotia Pacific Holding Co., carries Pacific Lumber's takeover debt and holds title to essentially all the commercial forests where logging takes place. And a little-mentioned third company, Salmon Creek Corp., holds --debt free -- the deed to the Headwaters Forest, the holy of holies for environmentalists who are trying to wrest it away from Hurwitz.

Beyond charges of reciprocal business dealings with Milken, both the FDIC and OTS accuse Hurwitz of masterminding United Savings' violation of something called the "net worth maintenance agreement," an obscure clause that was applied to United Savings as part of a deal to merge it in 1983 with another thrift that was already under Hurwitz's partial control.

Basically, the clause is a promise by United Savings to keep on hand an adequate financial cushion to protect depositors against losses. The feds say UFG agreed to kick in additional capital if United Savings' financial cushion ever sank below a particular level, specifically $242 million. But the feds say none of the Hurwitz entities ever chipped in a dime to United Savings, even when the thrift's desperate financial condition was unmistakable.

"Notwithstanding this knowledge, Hurwitz failed to report (to regulators) the true net worth of United Savings, continued to take actions that aggravated United Savings' losses and further decreased its net worth," the FDIC suit charges.

When it comes to the net worth maintenance agreement, Hurwitz has played a coy, legalistic game, arguing that the clause does not pertain to him or UFG because he never signed papers the feds sent over to him on the subject. But Hurwitz and his colleagues obviously are taking the allegation seriously, as they spent 12 pages responding to the net worth maintenance charge in their official answer to the OTS action. Among their responses: "We deny that Maxxam or Federated was obligated to infuse any assets into United Savings for any reason. We deny that Hurwitz or Munitz had an obligation to direct Maxxam to pay a non-existent obligation. In fact, as directors and officers of Maxxam, their obligation would be to ensure that Maxxam does not honor meritless claims."

Spokesman Irelan is equally adamant on the subject. "Neither Maxxam nor Charles ever signed any commitment to maintain the net worth of the S&L. He didn't, never. You may see something that UFG -- before it was acquired by Maxxam -- had signed a net worth maintenance agreement. When that was discovered, the regulators came to us and wanted us to sign to maintain the net worth, and we said, 'No. We won't.' "

Both federal suits also contend that Hurwitz and his associates were able to keep their game for as long as they did because they cooked United's books and then lied to regulators about it. In their joint response to the OTS, Hurwitz and his co-defendants insist that they never lied. But they do make an interesting attempt to shift the blame to the thrift's accountants, as if to suggest, "If we were keeping bogus books, why didn't the bean counters call us on it?" Well, the feds counter, we think you were lying to your accountants, too.

"To 'keep the doors open,' to forestall regulatory intervention and to insulate UFG, MCO and Federated from the need to make capital contributions to United Savings, Hurwitz and his colleagues covered up the true state of the association by a pattern of deceptive financial reporting and balance sheet manipulation," the FDIC charges. "The effect was to keep United Savings operating despite its desperate condition E. Moreover, by failing to honor UFG, MCO and Federated's net worth maintenance obligation, significant wealth was preserved by Hurwitz and his colleagues for distribution to themselves or for other investment purposes." In any case, when regulators seized United Savings on December 30, 1988, the thrift's net worth was a negative $261 million -- about $500 million less than it was supposed to have on hand under its net worth maintenance agreement.

Besides violating the net worth maintenance agreement and engaging in a quid pro quo with Drexel, both federal agencies charge Hurwitz and his associates with numerous unsafe business practices. The FDIC zeros in on United's junk bond portfolio, while the OTS homes in on the thrift's real estate lending practices. For good measure, the OTS action also charges Hurwitz and the other defendants with unsound compensation practices that cost United millions it didn't have to spare.

The FDIC takes particular exception to a loss-plagued collection of mortgage-backed securities, which were essentially sophisticated bets on the direction of interest rates. It was called "Joe's Portfolio" after Joe Phillips, the thrift's junk bond analyst, but it might as well have been dubbed the "Runaway Train." The portfolio managed the neat trick of losing a bundle as interest rates plunged from 10 percent to 7 percent in the three months ending in January 1986, and then losing millions more when interest rates roared back up to 10 percent in the spring of 1987. The feds say "Joe" may have been in charge of the trading, but his superiors were to blame for not jerking him back in line and terminating the portfolio after the size of the losses became apparent. (Phillips could not be located for this story and is not a defendant in either suit.) For instance, in one eight-week period of late 1986, Joe's Portfolio lost $23.7 million. By the time the final gong sounded, United and a related mortgage subsidiary had lost more than $275 million trading these ill-considered securities.

"Hurwitz, United Savings' officers and board members did little or no due diligence on their own," the FDIC charges. "They had little or no appreciation of the complexity of the instruments they acquired. Worse, the institution itself had no procedures or policies with respect to such securities, and few if any internal controls. As a result, Joe's Portfolio was seriously flawed from the beginning."

The feds also accuse United of juggling losses from its mortgage-backed securities trading so the losses wouldn't show up on the balance sheet and trigger a cash call on Hurwitz under the terms of the net worth maintenance agreement. "Instead of trying to reduce the interest rate risk in United Savings' large portfolio, respondents speculated on the direction of interest rates, recognized gains on one side of its portfolio without recognizing the losses on the other side, increasing the risk to United Savings and misrepresenting to [regulators] that United Savings was not in violation of its minimum net worth requirements," the OTS charges.

In detailing the charges related to United's real estate lending practices, federal regulators appear to indulge in a bit of sarcasm, accusing the defendants of not even reading newspaper headlines to learn that Texas commercial real estate was crashing around their ears. They say the thrift used rookie real estate appraisers, took promoters' words for the profit potential of their projects and repeatedly threw good money after bad.

As might be expected, Hurwitz and associates categorically deny every single accusation lobbed at them, with Hurwitz stressing that he had limited involvement in the day-to-day operations of United Savings. The bottom line, Irelan insists, is "Maxxam did not run United Savings, and Charles did not run United Savings."

Interestingly, in their formal 113-page response to the OTS action, Hurwitz and his co-defendants offer a grab bag of possible explanations for their actions. Here's a sampling of some of the justifications Hurwitz and his colleagues make to the feds: 1) We were just following the advice of a series of articles published in the Dallas Federal Home Loan Board's quarterly magazine; 2) accounting procedures on mortgage-backed securities were evolving in 1985-1987, and you are trying to hold us accountable retroactively for today's standards; 3) we just did what our accountants and outside auditors told us to do; and 4) "Hurwitz's actions and decisions were taken in the exercise of his best business judgment at the time and are not legally subject to the FDIC's second-guessing."

The co-defendants repeatedly charge that various internal memos and documentary evidence the feds cite in their suits are quoted out of context, misunderstood or misrepresented, and they also offer the same catch-all defense any child knows to try in a pinch: it wasn't our fault and, besides, everybody was doing it. Their joint response states: "United Savings' problems stemmed primarily from the depressed real estate market in the areas served by United Savings in the early 1980s and from other forces beyond its control that resulted in the failure of every similarly sized thrift and many of the largest bank holding companies in Texas."

Hurwitz's co-defendants in the OTS action responded jointly with him to the charges, and declined to return phone calls from the Press to elaborate in their defense. However, some of United Financial Group's old annual reports and shareholder communiques offer an unintentionally humorous insight into what some of the players might have been thinking, back when the game was still in full swing.

In UFG's 1987 10-K report to the SEC, Jenard Gross -- who doubled as president of both United Savings and its parent, UFG -- made this pledge to stockholders: "I will not suggest to you that we have the answer to making United profitable in 1988 E. I can and will promise you, however, that our management team is of such strength and character that we will make the most out of this environment."

That they did. Although the thrift failed within a year, the directors and officers collected millions in paychecks and severance bonuses for three more years. Court documents show these payments included almost $1 million cash paid out to Barry Munitz, now chancellor of the California State University System, and the forgiveness of principal and interest on a $835,000 loan UFG had made to Jenard Gross.

To make sure United Savings would be able to pay these exorbitant salary contracts and golden parachutes, court documents show the officers stashed $6.6 million in an escrow account just ten weeks before the thrift failed so shareholders couldn't get hold of it. At the time, United was so wobbly it could ill afford to have any money siphoned off. But even after receiving written notice from regulatory watchdogs that the golden parachutes and bonuses were illegal, the board granted them anyway, and gift wrapped them in blanket indemnifications to boot.

If Hurwitz and his friends are guilty of anything, it may be of having gone right up to the legal limit and then leaning way, way over the line. While such actions may not be technically illegal, they could easily be unethical. Can you go to jail for unethical behavior? Probably not. Can you be stripped of millions in assets for shaving the line a bit too close for the comfort of a particular judge and jury? Maybe.

"Hurwitz was always within the boundary of the law," says ethics and environmental studies professor Newton. "But he is a perfect example of how it is possible for a person to be ethical at one level and totally unethical at another. He's like a robber baron who coaches Little League and is a great father on his own time. He does not have the foggiest idea that what he's doing from 9 a.m. to 5 p.m. Monday through Friday has a terribly damaging effect on the public."

"But Hurwitz must have gotten a clue somewhere along the line that ethical considerations are a problem for him, because he does walk the line so carefully," Newton adds. (This opinion, incidentally, has earned the professor the attention of Maxxam's lawyers. After a case study she had presented on Hurwitz, Maxxam and Pacific Lumber at a business ethics seminar was published in a collection of academic essays, Newton received threatening letters designed to muzzle her from Maxxam general counsel Anthony Piero. Of all the corporations and executives profiled at seminars conducted by the Center for Business Ethics in the past 20 years, only Maxxam has threatened to sue over its portrayal.)

The question of whether or not someone can be held liable for operating in a moral gray zone may be one reason Hurwitz is trying so hard to consolidate the OTS case into the FDIC case. While there is the temptation to view the FDIC and OTS actions as duplicative, there are substantial differences between the two. First and foremost, the FDIC action is a true lawsuit against Hurwitz alone, which will be tried in Judge Lynn Hughes' federal district court in Houston. The OTS case is an administrative court action against Hurwitz, his companies and the officers and directors of United Savings, which will be heard in front of an administrative judge in Washington, D.C., where the government's case may presumably be a bit easier to prove. Hurwitz has filed papers with the federal district court in Houston seeking to combine the two actions in his own home court.

Maxxam's Irelan insists that request is a practical matter. First, the company would like to hold down legal costs and defend only one trial. But more important, Irelan says, if Hurwitz loses to the OTS in administrative court, he will appeal to the nearest federal district court, and the FDIC case already is in the federal courts system. "Why go through an administrative action when you already have the whole subject before a court?" Irelan says.

What Irelan doesn't say is that an OTS judge is undoubtedly going to be vastly more familiar with thrift case law than a Houston district court judge. And Judge Hughes tends to side more often with anti-government arguments than he does with pro-federal views, which makes his court a doubly promising venue, from Maxxam's point of view.

Rick Stearns, who is handling the OTS case against Hurwitz, says his agency is under no obligation to roll its case in with that of another federal agency. In fact, he suggests that if the OTS is forcibly rolled in with the FDIC, he may refile the entire action again, and drag Hurwitz and the other defendants right back up to Washington.

It should be underscored that none of the charges lodged against Hurwitz by the federal thrift regulators warrants jail time, primarily because the word "fraud" never appears in any of the court papers.

Stearns says the OTS decided not to file civil fraud charges against Hurwitz and the others because it was principally interested in recovering the bailout money, not in setting Hurwitz up for a criminal prosecution.

"All we have to prove is willful and reckless disregard of the regulatory requirements," Stearns explains. "That is a much lesser standard of proof than a fraud charge. And there's no sense in our trying to prove a more difficult case when we can recover damages under regulatory violations."

"In nothing that has been handed down by anybody is there any suggestion of criminality," he says emphatically. "None. Zero."

Passions run much higher in the United Savings case than in any of the previous actions against dead Texas thrifts because of how Hurwitz allegedly used the thrift to indirectly leverage his raid on Pacific Lumber, the corporate guardian of the largest remaining private stands of ancient redwoods in the world. After gaining control of Pacific Lumber, Hurwitz doubled and in some cases tripled logging rates to make enough money to pay down his huge takeover debts. Not only did that earn him the unceasing enmity of environmentalists, it also apparently led to his name appearing on a list of potential mail bomb targets compiled by the man accused of being the Unabomber, according to published reports.

And it has resulted in California environmentalists vigorously pushing their own solution to squaring United's debt to taxpayers by having the government expropriate the Headwaters Forest.

"There is a unique twist to this S&L case in that an outside group that has nothing to do with the FDIC is trying to push their own agenda -- something called debt-for-nature," says FDIC spokesman David Barr. "I guess it could be done, if it could be determined that whoever owned those trees was directly, financially responsible for decisions at that S&L. But there are a lot of legal things that would have to be ironed out to prove that."

The environmentalists see no such legal roadblocks. "We believe it is a very reasonable conclusion to this whole mess," says lawyer Jill Ratner of the Rose Foundation, a California group that studies economic and environmental issues. "The government has very substantial claims against Hurwitz and Maxxam as a result of the failure of United Savings. We believe those claims are real, and we believe the American people are entitled to receive something of value for the $1.6 billion we put into bailing out that S&L. Headwaters Forest would be an excellent property for the United States to receive in settlement of that claim."

Maybe so, but as Barr asks, "What's the FDIC going to do with a bunch of trees? We're in this to recover money."

Hurwitz has repeatedly said he is open to selling the Headwaters -- for the astronomical price of $500 million -- or trading it for prime federal lands. But he remains adamantly opposed to any plan that would reward his opponents with "something for nothing."

"There is no debt," Irelan reiterates. "Even if someone, somehow was to determine there is a debt, it has absolutely no ties to Pacific Lumber. This dialogue has to be recognized for what it is -- an attempt to get something -- the Headwaters Forest -- for nothing, a debt that doesn't exist."

Lately, Hurwitz has taken to characterizing the debt-for-nature swap as a frontal attack on private property rights. He has warned darkly in several op-ed pieces that such a deal would be the first step down a slippery slope to mass federal seizures. In an editorial published by the Houston Chronicle in mid-January, Hurwitz gravely cautions: "The tactics I describe could be imposed anywhere unless we, as American citizens, are steadfast in our resolve to defend what is fair and what is constitutional."

Irelan suggests Hurwitz may sue the federal government for damages under the Constitution's "takings" clause if loggers aren't permitted back into forests that are currently off limits through court orders protecting such endangered species as the spotted owl.

There were several state and federal bills that -- if Pacific Lumber had thrown its considerable weight behind them -- might have passed, setting up mechanisms whereby the government could acquire the Headwaters. However, the company backed a candidate (who had previously lobbied for Pacific Lumber) to unseat the author of the best of those measures. That Hurwitz-backed congressman -- Frank Riggs -- recently introduced legislation related to old-growth forests that one environmentalist describes as having "something to horrify everyone."

The Riggs measure would give Hurwitz a green light to do as he pleases in old-growth forests, where the enormous, clear-grained trees are worth several times the value of younger, knottier trees. The bill says if the federal government can't fork over the cash for Headwaters within 18 to 24 months, Pacific Lumber can enter the grove and log it indiscriminately, with total disregard for any impact on the ecosystem or endangered wildlife.

Irelan says Maxxam appreciates Riggs' efforts to get the issue "off dead center." But he says the whole notion of a debt-for-nature swap or a public buyout of Headwaters ignores the larger question of how many redwood trees the public wants to save.

"Some 80 percent of the remaining old-growth coastal redwoods are already permanently preserved in more than 350,000 acres of public parkland," he points out. "How much more do you want to preserve?"

The debt-for-nature proposal has sparked a flurry of letters between the idea's backers and White House chief of staff Leon Panetta, California Senators Barbara Boxer and Dianne Feinstein, virtually the entire California Democratic congressional delegation and Vice President Al Gore. All of those letters express support for the concept of debt-for-nature, but many suggest the mechanics of conducting such a swap would be difficult. But the mere existence of these communiques allows Maxxam to mutter darkly about being the target of political harassment.

However, Maxxam and Hurwitz haven't been reluctant to exercise their own muscle in the political arena. Late last year, Hurwitz fired off a series of letters to key members of Congress, attempting to get the endangered species protection lifted from the marbled murrelet -- an obscure seabird that nests almost exclusively in Pacific Lumber's old- growth forests -- and in 1992 he personally hosted Bob Dole's private reception during the Republican National Convention in Houston. He also has met with Gore to discuss Headwaters, in addition to Pacific Lumber's playing a large role in Riggs' campaign and the drafting of his Headwaters bill.

"I know Pacific Lumber had a big hand in writing the Riggs Bill because they told me they did," says Dana DuBose, an aide to Congressman George Brown, a California Democrat and one of the most knowledgeable people on Capitol Hill regarding the debt-for- nature issue. "The federal government can't require Hurwitz to offer up Headwaters, but we do want to reach a negotiated settlement that lets him win as well."

Despite opposition to virtually every move he makes, Hurwitz continues to cast himself in the role of civic benefactor. He tried it most recently in 1994, when he offered to bring casino gambling to downtown Houston. And he tried it a few years earlier when he offered to rescue faltering Continental Airlines with a deal that would've netted him $3 billion in assets for roughly $25 million of his own money.

"It would be funny if it weren't so tragic -- the chutzpah Hurwitz demonstrates trying to say he's good for the community when he's so bad for the community over the long-term," says Bill Bertain, another Northern California attorney who has been suing Hurwitz on a variety of matters for most of the past decade.

Newsweek columnist Sloan -- who has lambasted Hurwitz for years as a "junkmeister" and, jokingly, "Mr. Altruism" -- says Hurwitz's failed Continental Airlines and casino deals are typical of his style: "You can't blame Hurwitz for making these offers. Why not? If it works, he makes a fortune. If it doesn't, he doesn't lose. That's a Hurwitz kind of deal."

One thing Hurwitz is undeniably guilty of is having an enormous blind spot when it comes to public perception. The way Hurwitz has portrayed himself, he looks at things from a strictly business perspective, dispassionately reducing a scenario to unemotional spreadsheets and risk analysis profiles. After careful study, he makes a calculated -- if sometimes enormously risky -- gamble, using the funds of a corporation where, as the largest shareholder, he has more to lose than anybody else.

But Hurwitz seems to be consistently amazed when, in spite of his careful analysis and superior business judgment, all hell blows up after he makes a move. To call his confidence legendary is to understate it.

Witness Maxxam subsidiary Kaiser Aluminum's recently rebuffed $2.5 billion attempt to take over Alumax, a larger rival in the aluminum trade, which had previously passed on the chance to buy Kaiser for itself. Alumax insiders say the company turned the offer down in part because of management's concerns about Hurwitz's character and private agenda.

Or take the stock reclassification plan the Kaiser subsidiary unveiled several months ago, outraging some shareholders so severely that they went to court to stop it. The plan would've created a special class of super-voting stock, allowing Maxxam to sell two-thirds of its majority stake in Kaiser while maintaining absolute voting control. A Delaware Chancery Court issued a preliminary injunction against the reclassification two weeks ago.

Hurwitz seldom chooses to face his critics head-on. And who can blame him after that disastrous run-in he had with environmentalists in Austin six years ago? But there are signs that he may be wearying of the chase. After years of depositions, motions and other legal foot-dragging, Maxxam and its various entities are starting to break the logjams in courtrooms scattered from California to Delaware.

In California, for instance, Pacific Lumber and Maxxam agreed in December to settle a long-running collection of suits brought by attorney Bertain on behalf of the original Pacific Lumber shareholders, who felt the original Pacific Lumber board had sold them out for a ridiculously low price in Hurwitz's takeover. The angry shareholders had been seeking more than $1.5 billion in damages but accepted a settlement of $150 million, with about $33 million of that coming from Maxxam's pocket.

Meanwhile, Pacific Lumber, Maxxam and Hurwitz are in the final stages of an equally long-running fight with the U.S. Labor Department over whether Pacific Lumber illegally raided its employees' pension fund. After the takeover, Pacific liquidated the $60 million cash surplus in its pension fund and replaced the whole thing with annuities bought from Executive Life Insurance Co. -- another member of Milken's junk bond club -- which later went bust. Although Pacific Lumber has made up its workers' losses on the worthless annuities, the Labor Department is investigating possible violations of federal pension laws and illegal quid pro quo dealings.

In a January filing with the SEC, Maxxam revealed it has agreed in principle to settle the case, although it has yet to actually do so. But one of the federal attorneys working on the case hints that negotiations are particularly sensitive at the moment, meaning a settlement agreement is probably near.

Closer to home, United Savings' parent company -- UFG -- agreed in December to settle federal thrift regulators' claims related to its role in the violations of United Savings' net worth maintenance agreement and certain tax-sharing obligations. The OTS sopped up $9.45 million of the scant $12 million UFG had left in the bank. But, interestingly, neither the feds nor Maxxam will read any larger meaning into UFG's decision to settle rather than fight the federal case alongside Hurwitz. "It means UFG isn't a respondent; that's all," the OTS' Stearns says carefully.

Even Harold Simmons recently got his day in court, when his five-year-old suit against Hurwitz went into closing arguments in late February. No verdict had been returned at press time, "because you can't rush a Delaware court," Simmons says with a sigh.

"Hurwitz seems to be going through a settle-all-these-lawsuits-for-me phase," Martel suggests. "The issues are still alive, but the lawsuits are disappearing."

Yet Hurwitz has defiantly dug in his heels in the legal arenas where the stakes are highest. Hurwitz recently fired off a salvo of his own at federal thrift regulators, suing the OTS in federal court for refusing to sell him what was left of United Savings after the thrift went belly-up.

Maxxam's countersuit contends that its bid was $100 million higher than the one the feds chose, a decision that needlessly hiked the bailout tab for taxpayers. The countersuit also claims regulators lied to Maxxam about why its bid was rejected, and quotes at length from a draft RTC report that was prepared by the Washington law firm of Steptoe & Johnson.

However, what the suit fails to mention is that the Steptoe & Johnson report shows that the Federal Home Loan Bank Board members in charge of divvying up United's leftovers simply couldn't stomach the idea of giving them back to Hurwitz -- no matter how much he wanted to pay.

"If you had a group that had run a savings and loan into the ground, you did not want to reward such behavior by offering federal make-good money to allow these same individuals to retain control," explains New York University economics professor Lawrence White, a FHLBB member at the time who voted against Maxxam's bid.

Hurwitz will need all the moxie he can muster in a few months, when the battleground shifts to the courtroom. The OTS had planned to begin presenting its case in court by late summer, but Hurwitz's attorneys recently won a delay until January 1997. However, the FDIC is under orders to complete discovery in its case by the end of July. Pretrial motions and depositions in the lawsuit already fill the better part of a file cabinet at the federal courthouse in downtown Houston.

The nearly decade-long delay in bringing the federal case against Hurwitz and his associates worries some of his foes. Indeed, defense attorneys repeatedly point out in their responses to the FDIC and OTS that the various statutes of limitations have long since expired.

However, in light of the fact that Hurwitz and the other defendants kept signing federal tolling agreements, which extend the statute of limitations for as long as both sides agree to keep signing them, that argument is expected to go nowhere. Hurwitz stopped signing tolling agreements last July, and the FDIC filed suit against him in less than a week.

"Charles signed the tolling agreement because he had nothing to hide," Irelan says. "We gave the process time to work. As long as it has gone this far, we want the courts to resolve this."

Rick Stearns, for one, isn't worried about the lengthy delay in bringing the OTS case. "Our evidence is quite strong," he says. "We wouldn't have brought the case if we didn't expect to succeed on all charges. The documentary evidence will play a very large role; the trial will involve many, many exhibits."

Some of these exhibits look particularly damning for the Hurwitz side. One internal United Savings memo the feds obtained through subpoena discusses the dangerous state of the thrift's net worth and is marked "DESTROY AFTER READING." Apparently, somebody didn't.

But Hurwitz-obssessed California lawyer Martel worries that the passage of time has dimmed crucial memories, allowed important papers to be lost and softened public outrage.

"Hurwitz almost got away with it," Martel frets. "He may still."
So how will this all end for Hurwitz? The financial losses could be staggering -- both for him and Maxxam -- because of the sheer size of the damages being sought in the various cases.

Whip out a calculator and add these up: The FDIC wants $250 million from Hurwitz personally. The OTS wants its $1.6 billion back from the United Savings defendants, with a minimum of $200 million coming out of Maxxam's pocket. The settlement with the old Pacific Lumber shareholders will swallow $33 million of Maxxam's money, and the Department of Labor still hasn't said what price it will settle its pension case for. Harold Simmons wants Hurwitz to fork over about $43 million. Then there's Martel's claim for $5 billion. Whatever the total amount, it's more than either Hurwitz or Maxxam has.

Undoubtedly, the coming months will be among the most personally painful in Hurwitz's life, as the intensely private executive is forced to take his place on a hard courtroom bench -- day after day after day. If Hurwitz couldn't shrug off the heckling at UT, how much more excruciating will it be for him to face down the potentially damning testimony of trusted aides and employees, who will no doubt be subpoenaed against him in both Houston and Washington?

Back in 1992, when regulators despaired of ever making a solid case against him, journalist Sloan wryly observed: "If the federal agencies dealing with Hurwitz were redwood trees, they'd all be picnic tables by now."

As the clock ticks down on the last of the government's big S&L cases, those tables may have finally turned. Soon, it may be Hurwitz's turn to feel the buzzsaw veering alarmingly close.

In the April 25 story "The Case Against Hurwitz," California Congressman Frank Riggs was misidentified as having once lobbied for Pacific Lumber.